Existing studies on information technology outsourcing relationships have typically examined partnership factors that influence IT outsourcing effectiveness. This research extends such studies and draws upon relational exchange theory to investigate how relational elements in service level agreements (SLAs) may impact outsourcing relationships. The results show that the effects of a well-structured SLA in managing IT outsourcing relationship are significant. This paper also provides insight into the development of relational governance through a contractual mechanism over the entire course of an outsourcing engagement. Suggestions for appropriate SLA elements are also developed.